What’s Next for Bonds When All the News Seems Bad

[Trading With Larry Benedict]( Larry’s Note: Tonight’s the night for my Bitcoin Skimming event. At 8 p.m. ET, I’ll explain how to profit from bitcoin… without holding any bitcoin at all. In our testing, we’ve been able to make as much as [22x the profits]( of just buying and holding bitcoin. And we’ve done it without having to worry about all the ups and downs that the crypto market is so known for… That’s why I’m hoping you’ll join me tonight… and listen to how it all works. Whether you’re a longtime crypto fan or simply want to reap the benefit of Bitcoin's recent surge to around $34k, you deserve to have this strategy in your toolbox. All I ask is that you [RSVP right here with just one click](. See you tonight! What’s Next for Bonds When All the News Seems Bad By Larry Benedict, editor, Trading With Larry Benedict The last 3.5 years have been brutal for investors in the iShares 20 Plus Year Treasury Bond ETF (TLT). TLT invests in long-term U.S. Treasury Bonds (20 years and longer). And it has fallen around 54% since its March 2020 high… and over 20% just since May. That’s a huge hit for an asset class that is supposed to help reduce volatility in an investment portfolio. The Fed’s confirmation last month that interest rates would stay “higher for longer” compounded TLT’s recent fall. (That’s because existing bonds drop in value when new bonds are issued with higher yields.) But with the news so bearish, today I want to see what’s in store from here… A Steep Sell-Off TLT rallied at the start of this year. And after its massive downtrend, the 50-day moving average (MA, blue line) swung upward in February before tracking sideways through May: iShares 20 Plus Year Treasury Bond ETF (TLT) [Image] Source: eSignal Through that sideways period, the 10-day MA (red line) crossed the 50-day MA multiple times in both directions. However, from May onward, the downward angle of the 50-day MA kept getting steeper as TLT’s next down leg got underway. As the chart shows, this coincided with two other bearish signals… Recommended Link [Do NOT buy a single AI stock before seeing this important video]( [image]( Trading legend Jeff Clark, who predicted the crash of 2008, 2020, 2022 and made a fortune off the “dot-com” collapse… just issued a bold AI prediction: “Do NOT buy a single AI stock before you see this important LIVE demonstration” [Click here to see the details.]( -- - The 10-day MA crossed and stayed below the 50-day MA. Both MAs trended lower. - The relative strength index (RSI) crisscrossed the support/resistance level (green line) and fell into its lower range, where it has remained for the rest of TLT’s sell-off. But despite TLT’s sharp fall, it hasn’t been all one-way traffic down… Take another look: iShares 20 Plus Year Treasury Bond ETF (TLT) [Image] Source: eSignal In both May and July, TLT briefly counter-rallied when the RSI formed a “V” and rallied back up to resistance. And in August, TLT bounced… While the stock price was falling (upper left orange line), the RSI was climbing from oversold territory (lower left orange line)… When momentum is building like this, it will eventually cause a stock to rally – even in a downtrend. And there’s a similar pattern developing right now. The RSI and TLT stock price are converging again (right orange lines). So what am I looking for next? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Stay Nimble The RSI is making higher lows. And what happens next will be key. If the RSI keeps making higher lows, that could set TLT up for a potential short-term bounce and provide the opportunity for a potential long trade. But after such a strong sell-off, we’d need to be particularly nimble with any trade. (And remember, there are no guarantees.) If we catch a bounce, we would aim to exit the trade as soon as the RSI pushes up against resistance (green line), since that is where previous bounces have petered out. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag How do you think the Fed’s “higher for longer” narrative will impact the bond market going forward? Let us know at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Tech expert says this AI play will crush Nvidia]( Nvidia has been an undisputed champion of the artificial intelligence (AI) boom. It’s up as high as 7,910% since Colin Tedards’s firm issued a BUY recommendation on the stock. But Nvidia’s best days are over. Colin says another AI firm will shock the world in the coming days… and make investors huge gains. [Go here to get the full story.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. 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